Appraisal an issue for council in Launiupoko land purchase

October 31, 2013

LAHAINA - The purchase of the final link of the Pali to Puamana Coastline Park has been road-blocked by a questionable appraisal.

It's an apparent standoff between the legislative arm of the county government and the executive branch.

Both sides agree that the goal of the purchase is worthy: to ensure the land use for open space, public access and outdoor recreation in perpetuity.

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White

The budget director transmitted proposed legislation to the County Council, authorizing the purchase of the approximately 186 acres of land located at Launiupoko between Puamana and the Solid Waste Transfer Station along Honoapiilani Highway.

The offer on the table before the council's Budget and Finance Committee is $13 million and is supported by an appraisal dated Nov. 2, 2012, that was conducted by Certified Appraiser Ted Yamamura.

Councilman Mike White (Makawao, Haiku and Paia) is the chairperson of the Budget and Finance Committee. In an interview with the Lahaina News, White said red flags were raised when he asked for a copy of an earlier appraisal from the administration and was told it had been "destroyed, so I started taking a closer look at the appraisal."

"I now feel that we have an invalid appraisal - one that is fundamentally flawed and would not be accepted by a bank," so the committee has asked for a reappraisal.

Resolution No. 13-109, authorizing the council chair to contract for a revised appraisal, was adopted on Sept. 20, and a request was transmitted to the Mayor Alan Arakawa administration.

The resolution lists a variety of valid reasons for the request.

Simply put, the revised appraisal, the resolution recapped, "shall not rely upon dissimilar land sales, hypothetical conditions and extraordinary assumptions."

On Tuesday, Oct. 15, the administration answered the council's request for a revised appraisal, White said, "with this quote: 'The mayor and the managing director have decided not to respond to your request.' "

"I have to ask myself why are we being asked to buy at a price that is not reflective of market value. If the true value is close to $13 million, then give us an appraisal that analyzes it in a way that's honest and straightforward," White commented.

White stressed that 70 acres of the total acreage is non-developable.

The value of non-developable land is zero, he advised.

"The public perception is that we're buying oceanfront," he commented.

"The point is, none of this is beach-front," White said. "We're not buying access to beaches, because we already have the access, because it is all state."

White further stressed, "Nothing in this deal touches the existing road (Highway 30). All the purchase is mauka of the road; nothing changes within the road right-of-way or makai of the road."

"Of course," White added, "buying open space is something that all of us want to do. At the same time, I want to make sure that since what we're asked to buy here for $13 million was purchased 12 years ago for $1.1 million, I am gonna do my best to make sure that we've got an appropriate valuation on this."

The council is confronted with multiple challenges.

"Here we are with the pressure coming from the administration to buy, and from the sellers, saying, 'Hey, if you guys can't get this figured out by December 31, we're going to walk away from the deal,' " White commented.

The council, however, has options.

"There are two ways we can achieve this," White said.

"One is through a negotiated purchase, which is what the mayor is presenting. The other way is that, for park and public use, we can condemn the property; then the court decides what we pay."

Until there is validation or justification of the appraisal, White is not comfortable moving forward.

"They said they're gonna walk away. These guys (West Maui Land) have been around the block, and they're very comfortable with how to negotiate What they're asking us to pay for 186 acres is just a million-and-a-half dollars less than what they paid for 5,400 acres," he explained.

"The committee is in a holding pattern until it gets the new appraisal," White restated.